Reports are coming out that up to 10,000 businesses in Northern Ireland are now showing signs of financial distress as the lockdown restrictions continues to hit sales and profits. This is a 40% increase on the previous 12 months and shows that many businesses are hanging on by their fingertips right now.
Cornavirus Variants Creating Havoc
There are no signs that the restrictions will be easing this side of Easter meaning that the vast majority of businesses have some time to wait before they can become fully operational once more.
The new variants of coronavirus are playing havoc with any predictions of how the future will look, as at present we are unsure whether some of these variants will be able to be kept at bay with the vaccines currently on offer.
Worrying Signs Of Early Distress
Lawrence O`Hara of rescue and recovery specialists Begbies Traynor, talking about the number of businesses in early financial difficulties in an article in the Irish News said:
“It’s extremely worrying to see such a huge rise in signs of early distress, with so many companies here struggling in the face of a continued fall-off in trade after nine months of almost constant Covid restrictions.
“While instances of more advanced signs of distress have actually fallen, this is probably due to the government’s insolvency prevention measures which, together with pandemic-related financial aid, are masking the true picture.
“We fear our latest research indicates escalating distress with more economic problems being stored up for further down the line, once these support measures are withdrawn.”
The article by business editor Gary McDonald also pointed out that “Every one of the 22 sectors in Northern Ireland monitored by the Red Flag Alert research experienced double digit increases in ‘significant’ distress in the final quarter of 2020 compared with the last quarter of the previous year.”
Strong Government Backing Required
There is only so long that any business can survive when revenues are stripped down to the bone for an uncertain length of time, so what these firms need is the strong backing of the government in the form of grants etc. There has been help available but it has not been enough in many instances, businesses are crying out for help immediately, so the powers that be must act as swiftly as they can to ensure no more businesses go under.
If you are a business owner or manager who is suffering with lockdown restrictions and you need some help and advice please give our offices a call at WHR Accountants for a no obligation chat, call us on 028 3752 2909.